Fast-growth companies share one thing in common—and it's important

All fast-growth companies share one thing in common. Regardless of who their customers are, their business model, the type of product, industry, or region of the globe they’re operating in, they all make a product that a large group of people loves. They’ve built products that, in the eyes of their customers, are simply must-have.

While creating a must-have product alone is not sufficient for breakout success, it is the baseline requirement for rapid and sustainable growth. Of course, building a must-have product isn’t easy, and one result is that too often those launching new businesses or products put the cart before the horse, pouring resources and staff into trying to drive more customers to a product that isn’t actually loved, or sometimes even understood, by its target market. This is one of the most common and deadly mistakes start-up founders make, and it’s also a huge problem that often surfaces when established firms, even those known for their innovation prowess, launch new products. Just think of Google Glass and Amazon’s Fire Phone—both innovative products that nobody wanted. Or the infamous Microsoft Zune media player, launched in November 2006, which Microsoft reportedly spent at least $26 million to promote but which never generated more than a tepid response. The Zune was not a bad product; many critics considered it quite well designed. But it added no “wow factor” to make it more appealing than Apple’s already ubiquitous iPods.

Despite continued efforts to stoke sales, including the release of an improved version, the Zune HD, in 2009, the Zune was never able to garner more than a single-digit share of the market and was discontinued in 2011.

One of the cardinal rules of growth hacking is that you must not move into the high-tempo growth experimentation push until you know your product is must-have, why it’s must-have, and to whom it is a must-have: in other words, what is its core value, to which customers, and why. (The exception to this rule being businesses such as social networks, where the core value is the people on the platform.)

This may sound blindingly obvious, but the fact is that it can sometimes take enormous patience because the pressure to start pushing for growth is intense. For start-ups, that’s often due to demands from taking venture capital, or, on the flip side, because the company needs to prove itself in order to raise capital, or generate revenue to keep the lights on. Even in established firms, where products are generally assigned a target revenue contribution by a specified date, there is pressure to start demonstrating growth, yesterday. And as this pressure mounts, the belief that growth can be forced, usually by increasing spending on marketing, becomes increasingly alluring.

But the hard truth is that no amount of marketing and advertising can make people love a substandard product. If you haven’t created and identified core value before you make your growth push, you’ll either end up with illusory growth at best or market rejection at worst. Sure, a glitzy launch can create some initial interest, but if your product doesn’t wow people, all the celebrity spokespeople and multimillion-dollar ad campaigns in the world won’t result in sustainable growth.

A pernicious misconception about growth hacking is that it is primarily about building virality into products. That is indeed one of the key tactics, but like other growth efforts, it must only be deployed after the product has been determined a must-have. As Chamath Palihapitiya, the original head of the Facebook growth team recalls stressing in launching the team’s growth efforts, “I don’t want you to give me any product plans that revolve around this idea of virality. I don’t want to hear about it.”

Growth teams need to adopt rigorous methods for probing into user behavior in order to discover the core value of their product or service. Additionally, growth teams need to recognize that sometimes establishing what the core value is, or should be, isn’t about the features of the product or service itself, but rather a matter of connecting with the right core market, which might be quite different from the originally envisioned one.

Finally, it’s important to note that identifying core value does not necessarily follow directly from having created it. Often those of us building and marketing new products think we know what aspect of our product consumers will love and often we are wrong. Sometimes it’s a feature or user experience that is quite different from what was hypothesized in the original product vision as the core value; other times, it’s one that was built into the product later as almost an afterthought. Whichever the case, it’s up to the growth team to find out.

What’s the Aha Moment?

Having reached a $2 billion valuation as a publicly traded company in 2016, Yelp’s success might today seem preordained. But in fact, its growth was sluggish at first as Yelp struggled against stiff competition from the much larger Citysearch, which in 2005 was a top 50 site on the Web and enjoyed the backing of its massive parent company, media mogul Barry Diller’s InterActiveCorp. Yelp, by contrast, which had launched as a proof of concept in October of 2004, was barely getting its feet under itself. Even founder Jeremy Stoppelman thought the service was of questionable value. Then Stoppelman’s team discovered, by poring through user data, that a surprisingly large number of users were taking advantage of a feature buried almost laughably deep within the site—a feature that allowed users to post reviews of local businesses.

The team ran some tests to see how visitors would respond when reviews were put front and center, and when they saw good results, they pivoted from the original business model of friends asking friends for business recommendations and put the reviews at the heart of the experience. But they didn’t stop there. The team then created 20 million profiles for small businesses in the Bay Area on the site and encouraged users to add their reviews. Growth took off. Meanwhile, Citysearch is now little more than a footnote, having been folded into CityGrid Media in 2010.

Yelp had found their aha moment. This is the moment that the utility of the product really clicks for the user; when the user really gets the core value—what the product is for, why they need it, and what benefit they derive from using it. Or in other words, why that product is a “must-have.” This experience is what turns early adopters into power users and evangelists. For Yelp, that experience was the ability to discover promising local restaurants and businesses through trusted community reviews. For eBay, the aha moment was finding and winning one-of-a-kind items at auction from people all over the world. For Facebook, it was instantly seeing photos and updates from friends and family and sharing what you were up to. For Dropbox, it was the concept of easy file sharing and unlimited file storage. An aha experience is a necessary ingredient of sustainable growth.

With some products, the aha experience happens immediately; like love at first sight. But with often, people have to use a product a certain amount of time or experience a certain feature before they truly fall in love with it. For example, Twitter struggled to sustain growth in its early days until it learned (from doing extensive analysis of its user data) that users who quickly started following at least 30 other users were much more engaged and likely to stay using the service. Digging into why following 30 people seemed to be the tipping point, the Twitter growth team found that getting a steady stream of news and updates from people they were interested in was the aha moment for people. Following 30 people created a stream of updates that made the service “must-have.”

Identifying what a product’s aha moment is can sometimes be quite tricky. It’s entirely possible to launch a product and conclude, because you’re experiencing anemic growth, that the product simply doesn’t have any aha magic when, in fact, certain users might already be wildly enthusiastic about it. So a vital step in determining whether your product has the aha potential is to seek out truly avid fans by mining user data and feedback, and then to search for any similarities in the ways these people use the product for hints about what value they get from your product that less enthused users perhaps aren’t. Sometimes this will surface a pattern such as the 30 people being followed on Twitter, but at other times, your discoveries will point the way to further product development, or even a substantial product pivot or rebuild.

The good news is that while discovering how to make a product deliver an aha moment can be very difficult, determining whether or not your product meets the baseline requirement generally doesn’t require elaborate diagnostics. In our book, we offer a simple assessment to help you figure out whether your product is just a “nice to have,” or something that customers will love. If the feedback points to the latter, it’s time to ramp up growth efforts. If people don’t love it, however, you’re better served digging into getting the product right before you launch headlong into growth, efforts which rather than rocket you skyward, may inadvertently run you straight into the ground.

Adapted from HACKING GROWTH: HOW TODAY’S FASTEST-GROWING COMPANIES DRIVE BREAKOUT SUCCESS Copyright ? 2017 by Sean Ellis and Morgan Brown. Published by Crown Business, an imprint of Penguin Random House LLC.